Economic Development Is A Good Thing
July 28, 2016 at 4:25 p.m.
Last Saturday we ran a small story about Columbia City attracting an automotive plant that will employ some 250 to 300 people.
That same town a few months back collected another automotive plant.
I think Columbia City is doing a good job of expanding its tax base.
That's important.
You see, when you expand your tax base and increase your assessed valuation, it tends to dilute the property tax burden for everybody in the county.
It's really quite simple. In Indiana, the tax rate is applied to the assessed valuation to generate tax revenue.
If the assessed valuation is $1,000 and the tax rate is $2 per hundred of assessed valuation the tax generated is $20.
If the assessed valuation goes up to $1,500 and the rate stays at $2, it would generate $30 in property taxes.
But in Indiana, there's this frozen levy thing happening. It's an involved process, but generally it limits the amount of taxes that can be collected.
The amount of taxes collected by any taxing unit can go up only 10 percent in any given year.
So that $20 in tax revenue in our example could go up to only $22 in one year. With the increased assessed valuation, the tax rate would have to go down to $1.47 to stay within the frozen levy.
So can we all agree that an increase in assessed valuation is a good thing?
So why is it then, that so many people around our county - including some elected officials - argue against it?
Some even argue against attracting industry.
They surmise that if we attract a new industry, there will be more people here. Pretty soon this will be a big city with big crime and big poverty.
They argue against funding the things necessary to increase assessed valuation.
Things like infrastructure. Things like sewers.
A perfect example is the way the debate went when it came to establishing an economic development income tax. EDIT was the evil acronym.
EDIT would provide money to fund needed improvements in infrastructure. It would have allowed Warsaw, for example, to get rolling on a second sewage treatment plant.
The current plant is just about at maximum capacity.
Former Warsaw Mayor Jeff Plank had documented cases of local businesses that wanted to expand but couldn't for lack of sewage treatment facilities.
If existing local businesses are forgoing expansion, do you think it's likely we'll be attracting any new businesses.
It costs lots of money to build a sewage treatment facility.
But it will cost lots more in the long run not to build one.
For a long time, this area has leaned heavily on its "orthopedic capital of the world" status.
Industry here is diverse. There are other types of manufacturing going on, but the orthopedic industry is the number one generator of jobs.
But times change. There have been layoffs in that industry.
It is not beyond the realm of probability that an orthopedic manufacturer might be sold or move out of town.
That's why our leaders need to act now. They shouldn't wait to react to a negative situation.
They should act now to create a positive situation for the future.
Columbia City, obviously, has in place the necessary infrastructure to attract companies that offer good, high-paying jobs.
Warsaw doesn't.
City and county officials had to work together over in Whitley County to make it happen.
Here, sometimes it seems as if the city and county are rivals. Last time EDIT came up, Kosciusko Development Inc. and the city of Warsaw made some pretty solid proposals.
County officials voted no.
There was lots of talk by county residents about how EDIT was some pet project of Warsaw and that it would only benefit Warsaw.
That's inaccurate and counterproductive.
What benefits Warsaw, benefits the county. What benefits the county benefits Warsaw.
The two entities don't exist in separate little vacuums.
I know it's tough to be an elected official. No matter what you do or say, you're always going to make somebody mad.
But if somebody has to be mad, it should be somebody with the status quo/us-against-them mentality.
It should be somebody who argues against economic development.
Somebody who says we don't need anymore sewer capacity.
Somebody who says we don't need any more industry or jobs or people.
No one is advocating wild, unrestrained, unplanned growth.
But it's well past time to be working toward some controlled economic development.
If our elected officials work together, maybe the next story we run will be about a new manufacturing facility locating in our county. [[In-content Ad]]
Last Saturday we ran a small story about Columbia City attracting an automotive plant that will employ some 250 to 300 people.
That same town a few months back collected another automotive plant.
I think Columbia City is doing a good job of expanding its tax base.
That's important.
You see, when you expand your tax base and increase your assessed valuation, it tends to dilute the property tax burden for everybody in the county.
It's really quite simple. In Indiana, the tax rate is applied to the assessed valuation to generate tax revenue.
If the assessed valuation is $1,000 and the tax rate is $2 per hundred of assessed valuation the tax generated is $20.
If the assessed valuation goes up to $1,500 and the rate stays at $2, it would generate $30 in property taxes.
But in Indiana, there's this frozen levy thing happening. It's an involved process, but generally it limits the amount of taxes that can be collected.
The amount of taxes collected by any taxing unit can go up only 10 percent in any given year.
So that $20 in tax revenue in our example could go up to only $22 in one year. With the increased assessed valuation, the tax rate would have to go down to $1.47 to stay within the frozen levy.
So can we all agree that an increase in assessed valuation is a good thing?
So why is it then, that so many people around our county - including some elected officials - argue against it?
Some even argue against attracting industry.
They surmise that if we attract a new industry, there will be more people here. Pretty soon this will be a big city with big crime and big poverty.
They argue against funding the things necessary to increase assessed valuation.
Things like infrastructure. Things like sewers.
A perfect example is the way the debate went when it came to establishing an economic development income tax. EDIT was the evil acronym.
EDIT would provide money to fund needed improvements in infrastructure. It would have allowed Warsaw, for example, to get rolling on a second sewage treatment plant.
The current plant is just about at maximum capacity.
Former Warsaw Mayor Jeff Plank had documented cases of local businesses that wanted to expand but couldn't for lack of sewage treatment facilities.
If existing local businesses are forgoing expansion, do you think it's likely we'll be attracting any new businesses.
It costs lots of money to build a sewage treatment facility.
But it will cost lots more in the long run not to build one.
For a long time, this area has leaned heavily on its "orthopedic capital of the world" status.
Industry here is diverse. There are other types of manufacturing going on, but the orthopedic industry is the number one generator of jobs.
But times change. There have been layoffs in that industry.
It is not beyond the realm of probability that an orthopedic manufacturer might be sold or move out of town.
That's why our leaders need to act now. They shouldn't wait to react to a negative situation.
They should act now to create a positive situation for the future.
Columbia City, obviously, has in place the necessary infrastructure to attract companies that offer good, high-paying jobs.
Warsaw doesn't.
City and county officials had to work together over in Whitley County to make it happen.
Here, sometimes it seems as if the city and county are rivals. Last time EDIT came up, Kosciusko Development Inc. and the city of Warsaw made some pretty solid proposals.
County officials voted no.
There was lots of talk by county residents about how EDIT was some pet project of Warsaw and that it would only benefit Warsaw.
That's inaccurate and counterproductive.
What benefits Warsaw, benefits the county. What benefits the county benefits Warsaw.
The two entities don't exist in separate little vacuums.
I know it's tough to be an elected official. No matter what you do or say, you're always going to make somebody mad.
But if somebody has to be mad, it should be somebody with the status quo/us-against-them mentality.
It should be somebody who argues against economic development.
Somebody who says we don't need anymore sewer capacity.
Somebody who says we don't need any more industry or jobs or people.
No one is advocating wild, unrestrained, unplanned growth.
But it's well past time to be working toward some controlled economic development.
If our elected officials work together, maybe the next story we run will be about a new manufacturing facility locating in our county. [[In-content Ad]]